Service Tax on Construction of Residential Apartments

This query is : Resolved

Rasesh (Querist)
Follow

14 August 2010 Suppose a builder wants to collect and pay service tax, which the best scheme available to him.

1) 75% abatement
2) 67% abatement
3) 4.12% WCT (whether available to him)
4) 10.30% only on Labour (whether available to him)

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
Follow

14 August 2010 All the schemes are having own limitations and advantage

option 1 & 2- you may not claim cenvat input

option 3 - you can avail cenvat, but threre is no segragation of material and labour, total contract value will be the taxable.

Option 4- Manitenance of invoice separately labour and mateirals and cenvat input also available

Rasesh

Rasesh (Querist)
Follow

14 August 2010 I agree on all the above.

Please clarify whether option 3 and option 4 are available to a builder selling residential apartments.

There is one view that since the entire tower is sold under different apartments, option 3 and 4 are not available to a builder.

Vipin Gupta

Vipin Gupta (Expert)
Follow

14 August 2010 Dear Sir,

Since the builders get themselves registered under the work contract under the Existing VAT so they can definately take the benefit of 4.12 % Tax

Rasesh

Rasesh (Querist)
Follow

16 August 2010 Correct me if I am wrong. The final understanding is as under:

1) Builder gets himself registered under work contract under existing VAT and takes benefit of 4.12% scheme

2) The apatments are sold before getting Completion certificate.

3) Builder pays Service Tax under the 4.12% and offsets it against input credit for services and capital goods (not for input goods).

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

DHANASHRI KARMARKAR

CA Aakarsh Jain

Michael & Co.

divakar podaturu

sachingurav

Subscribe Now

Service Tax on Construction of Residential Apartments

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA